AN intensifying war of words between the French presidential race frontrunner Francois Hollande and German Chancellor Angela Merkel is putting the two politicians on a collision course over ending the region's sovereign debt crisis.
Yesterday Mr Hollande stepped up attacks on Ms Merkel's belt-tightening solution to Europe's crisis, insisting "it's not for Germany to decide for the rest of Europe".
Responding to the stinging criticisms, Michael Meister, the deputy caucus chairman of Ms Merkel's Christian Democrats, said last night that "Herr Hollande has misunderstood the problems in his country and in other euro-area countries".
The French Socialist candidate wants to renegotiate the fiscal pact, and has said if he's elected France won't ratify it without a component on spurring growth. For her part, Ms Merkel has reiterated her budget-cutting message in the face of rising criticism of Germany's focus on austerity.
Since beating President Nicolas Sarkozy in the first round of France's presidential election on April 22, Mr Hollande has stepped up his push against austerity in favour of growth.
Although he has said he will balance the budget by 2017, he wants to hire 60,000 teachers and public school employees and 5,000 police officers over the next five years and pull back the retirement age to 60 from 62 for some people.
"If one throws money into a country with structural problems that won't solve those problems," Mr Meister said.
Ms Merkel's government "strictly" opposes "pumping more money into economies," he said. "The aim is to gain control over excessive debt, not increase it.''
While European Central Bank president Mario Draghi this week called for a "growth compact" to follow the fiscal pact, he made clear he wants structural changes and competitiveness, not additional spending.
Mr Hollande said yesterday that he disagrees with Mr Draghi's methods for fuelling economic growth.
Spain, whose sovereign credit rating was yesterday cut for the second time this year by Standard & Poor's, is sticking to its line that austerity should be the main driver of policy as it tries to quash concern that it will be pushed to follow Ireland, Portugal and Greece into a bailout.
Spain's economy minister Luis de Guindos said Europe couldn't afford to twin the fiscal treaty with stimulus measures.
"A growth pact has to be focused on structural reforms," he said. "I do not see that the growth pact should involve any sort of fiscal boost or stimulus."
Speaking on French television on Thursday night, Mr Sarkozy rejected Mr Hollande's idea to increase public spending. "Do you think it's by hiring 60,000 civil servants that we will create growth? Do you think we can keep spending money we don't have?"
Even so, Mr Hollande is counting on the support of the French electorate to boost his bargaining power on the European stage. "The debate is shifting," he said yesterday. "Not only has the ECB president addressed this but the president of the European Council has said he's ready to prepare for changes."
EU president Herman Van Rompuy said yesterday he might help prepare for a late June summit of the bloc's leaders with an invitation to an earlier "informal" dinner.
Speaking yesterday in Brussels, Mr Van Rompuy also said that the EU has "hardly any room for fiscal stimulus" and that "structural reforms remain the main lever at our disposal". (Bloomberg)